The industrial production index measures the activity and output of the industry sector, which is one of the most volatile components of the economy of the eurozone, and it is measured on a monthly basis.
It should take account of: the variations in type and quality of the commodities and the input materials, changes to stocks of finished goods and work in progress, changes to technical input-output relations (i.e. processing techniques) and services such as the assembling of production units, mounting, installation repairs, planning, engineering or the creation of software.
As with the Purchasing Managers’ Indices, a higher Industrial Production is considered as a positive signal, meaning that the economy is growing, and which brings more investors to that country. This in turn strengthens that currency, i.e. currency appreciation.
On the other hand, one should also take into consideration that very high levels of industrial production, together with high GDP growth rates, may lead to overheating of the economy. This brings high levels of inflation, decreasing the value of money, i.e. real rates of return, leading to the depreciation of the currency because of the capital withdrawal from the financial market.
Periodicity of publication
Eurostat publishes the Industrial Production no later than 45 days after the end of a reference period.